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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Barclays Plc | LSE:BARC | London | Ordinary Share | GB0031348658 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.70 | 0.33% | 213.95 | 213.90 | 214.00 | 215.15 | 212.60 | 213.30 | 44,866,775 | 16:35:21 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Commercial Banks, Nec | 25.38B | 5.26B | 0.3470 | 6.16 | 32.42B |
From May 2019 to May 2024
TIDMBARC
RNS Number : 6543V
Barclays PLC
30 October 2014
Barclays PLC
Interim Management Statement
30 September 2014
Table of Contents
Interim Management Statement Page Performance Highlights 4-6 Group Performance Review 7-9 Results by Business * Personal and Corporate Banking 10 * Barclaycard 11 * Africa Banking 12 * Investment Bank 13-14 * Head Office 15 * Barclays Non-Core 16-17 Appendix I - Quarterly Results Summary 18-19 Appendix II - Performance Management * Returns and Equity by Business 20-21 * Margins and Balances 22 Appendix III - Consolidated Summary Income Statement, Balance Sheet and Statement of Changes in Equity 23-25 Appendix IV - Capital 26-27 Appendix V - Leverage 28 Appendix VI - Credit Risk 29 Appendix VII - Other Information 30
BARCLAYS PLC, 1 CHURCHILL PLACE, LONDON, E14 5HP, UNITED KINGDOM. TELEPHONE: +44 (0) 20 7116 1000. COMPANY NO. 48839
Notes
The term Barclays or Group refers to Barclays PLC together with its subsidiaries. Unless otherwise stated, the income statement analysis compares the nine months to 30 September 2014 to the corresponding nine months of 2013 and balance sheet analysis as at 30 September with comparatives relating to 30 June 2014. The abbreviations 'GBPm' and 'GBPbn' represent millions and thousands of millions of Pounds Sterling respectively; and the abbreviations '$m' and '$bn' represent millions and thousands of millions of US Dollars respectively. The comparatives have been restated to reflect the implementation of the Group structure changes and the reallocation of elements of the Head Office results under the revised business structure. These restatements were detailed in our announcement on 10 July 2014, accessible at http://www.barclays.com/barclays-investor-relations/results-and-reports.
Adjusted profit before tax, adjusted attributable profit and adjusted performance metrics have been presented to provide a more consistent basis for comparing business performance between periods. Adjusting items are considered to be significant but not representative of the underlying business performance. Items excluded from the adjusted measures are: the impact of own credit; provisions for Payment Protection Insurance and claims management costs (PPI) and interest rate hedging redress; gain on US Lehman acquisition assets; provision for ongoing investigations into Foreign Exchange; loss on announced sale of the Spanish business; and goodwill impairment. As management reviews adjusting items at a Group level, results by business are presented excluding these items. The reconciliation of adjusted to statutory performance is done at a Group level only.
Relevant terms that are used in this document but are not defined under applicable regulatory guidance or International Financial Reporting Standards (IFRS) are explained in the Results glossary that can be accessed at www.Barclays.com/results.
The information in this announcement, which was approved by the Board of Directors on 29 October 2014 does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2013, which included certain information required for the Joint Annual Report on Form 20-F of Barclays PLC and Barclays Bank PLC to the US Securities and Exchange Commission (SEC) and which contained an unqualified audit report under Section 495 of the Companies Act 2006 (which did not make any statements under Section 498 of the Companies Act 2006) have been delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.
These results will be furnished as a Form 6-K to the SEC as soon as practicable following their publication. Once furnished to the SEC, copies of the Form 6-K will also be available from the Barclays Investor Relations website www.barclays.com/investorrelations and from the SEC's website at http://www.sec.gov.
Forward-looking statements
This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to certain of the Group's plans and its current goals and expectations relating to its future financial condition and performance. Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as 'may', 'will', 'seek', 'continue', 'aim', 'anticipate', 'target', 'projected', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe', 'achieve' or other words of similar meaning. Examples of forward-looking statements include, among others, statements regarding the Group's future financial position, income growth, assets, impairment charges and provisions, business strategy, capital, leverage and other regulatory ratios, payment of dividends (including dividend pay-out ratios), projected levels of growth in the banking and financial markets, projected costs or savings, original and revised commitments and targets in connection with the Transform Programme and Group Strategy Update, run-down of assets and businesses within Barclays Non-Core, estimates of capital expenditures and plans and objectives for future operations, projected employee numbers and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. These may be affected by changes in legislation, the development of standards and interpretations under International Financial Reporting Standards (IFRS), evolving practices with regard to the interpretation and application of accounting and regulatory standards, the outcome of current and future legal proceedings and regulatory investigations, future levels of conduct provisions, the policies and actions of governmental and regulatory authorities, geopolitical risks and the impact of competition. In addition, factors including (but not limited to) the following may have an effect: capital, leverage and other regulatory rules (including with regard to the future structure of the Group) applicable to past, current and future periods; UK, US, Africa, Eurozone and global macroeconomic and business conditions; the effects of continued volatility in credit markets; market related risks such as changes in interest rates and foreign exchange rates; effects of changes in valuation of credit market exposures; changes in valuation of issued securities; volatility in capital markets; changes in credit ratings of the Group; the potential for one or more countries exiting the Eurozone; the impact of EU and US sanctions on Russia; the implementation of the Transform Programme; and the success of future acquisitions, disposals and other strategic transactions. A number of these influences and factors are beyond the Group's control. As a result, the Group's actual future results, dividend payments, and capital and leverage ratios may differ materially from the plans, goals, and expectations set forth in the Group's forward-looking statements. Additional risks and factors are identified in our filings with the SEC including our Annual Report on Form 20-F for the fiscal year ended 31 December 2013, which are available on the SEC's website at http://www.sec.gov.
Any forward-looking statements made herein speak only as of the date they are made and it should not be assumed that they have been revised or updated in the light of new information or future events. Except as required by the Prudential Regulation Authority, the Financial Conduct Authority, the London Stock Exchange plc (the LSE) or applicable law, Barclays expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Barclays' expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any additional disclosures that Barclays has made or may make in documents it has published or may publish via the Regulatory News Service of the LSE and/or has filed or may file with the SEC.
Performance Highlights
Chief Executive's Statement
"These results, with a 5% increase in profits before tax, show further steady progress towards our Transform financial commitments for 2016, and demonstrate how our strategic decision to rebalance Barclays has created greater resilience in the Group. Our Core businesses - the future of Barclays - have delivered an ROE of 10.5%, driven by our powerhouse Personal and Corporate Banking business and continued strong growth in Barclaycard. The strength of our Africa Banking franchise is clearly visible despite currency headwinds. The Investment Bank's performance in the quarter was disappointing, but we have been able to offset that within the rebalanced Group and still deliver good Core performance. We have strengthened capital and leverage, net tangible asset value per share is up, and we continue to drive costs lower. Equity is being released from our Non-Core as RWAs come down, and we saw good progress in business disposals such as the sale of the Spanish business. In aggregate, this is a good performance from the Group, our strategy is working, and we expect to see continued progress as we go forward."
Antony Jenkins, Group Chief Executive
Progress on Transform: Higher Group adjusted PBT, driven by positive cost to income jaws across the majority of the Core business and continued Non-Core run down resulting in improved Group capital and leverage ratios
-- Group adjusted profit before tax increased 5% to GBP4,939m with Core adjusted profit before tax broadly stable at GBP5,587m (2013: GBP5,682m) and an improvement in Non-Core loss before tax of 33% to GBP648m
-- Total adjusted operating expenses decreased7% to GBP13,186m, with a reduction in headcount of 7,800 since September 2013
-- Fully loaded Common Equity Tier 1 (CET1) ratio increased to 10.2% (June 2014: 9.9%) and the estimated BCBS leverage ratio increased to 3.5% (June 2014: 3.4%). Subject to completion, the announced Spanish business sale would result in an increase in the CRD IV fully loaded CET1 ratio to 10.4% as at 30 September 2014
-- Net tangible asset value per share increased 8p from June 2014 to 287p
Other notable items:
-- A GBP461m gain on US Lehman acquisition assets has been recognised as an adjusting item. 2013 adjusted profit before tax has been restated to exclude the Q213 GBP259m gain for comparability
-- A GBP500m provision has been recognised relating to ongoing investigations into Foreign Exchange with certain regulatory authorities
-- Provision release of GBP160m for interest rate hedging redress, for which outcomes have been communicated to 99% of customers covered by the redress exercise
-- Additional PPI redress provision of GBP170m based on an updated current best estimate of future redress and associated costs
-- Loss on the announced sale of the Spanish business of GBP364m
Performance Highlights
Hot Features
Premium
Barclays Unaudited Results Adjusted Statutory
=============================== ================================
for the Nine Months Ended 30.09.14 30.09.13(1) 30.09.14 30.09.13
GBPm GBPm % Change GBPm GBPm % Change
================================ ======== =========== ======== ========== ========== ========
Total income net of insurance
claims 19,710 21,257 (7) 20,267 21,391 (5)
Credit impairment charges
and other provisions (1,595) (2,353) 32 (1,595) (2,353) 32
================================ ======== =========== ======== ========== ========== ========
Net operating income 18,115 18,904 (4) 18,672 19,038 (2)
Operating expenses (12,051) (13,239) 9 (12,051) (13,239) 9
Litigation and conduct (309) (164) (88) (1,719) (2,164) 21
================================ ======== =========== ======== ========== ========== ========
Operating expenses excluding
costs to achieve Transform (12,360) (13,403) 8 (13,770) (15,403) 11
Costs to achieve Transform (826) (741) (11) (826) (741) (11)
================================ ======== =========== ======== ========== ========== ========
Total operating expenses (13,186) (14,144) 7 (14,596) (16,144) 10
Loss on announced sale of
the Spanish business(2) - - (364) -
Other net income/(expenses) 10 (43) 10 (43)
================================ ======== =========== ======== ========== ========== ========
Profit before tax 4,939 4,717 5 3,722 2,851 31
Tax charge (1,630) (1,505) (8) (1,496) (1,040) (44)
================================ ======== =========== ======== ========== ========== ========
Profit after tax 3,309 3,212 3 2,226 1,811 23
Non-controlling interests (551) (629) 12 (551) (629) 12
Other equity interests(3) (170) - (170) -
================================ ======== =========== ======== ========== ========== ========
Attributable profit 2,588 2,583 - 1,505 1,182 27
Performance Measures
================================ ======== =========== ======== ========== ========== ========
Return on average tangible
shareholders' equity(3) 7.4% 7.7% 4.4% 3.6%
Return on average shareholders'
equity(3) 6.3% 6.6% 3.8% 3.1%
Cost: income ratio 67% 67% 72% 75%
Loan loss rate (bps) 43 64 43 64
Basic earnings per share(3) 16.1p 19.0p 9.4p 8.7p
Dividend per share 3.0p 3.0p 3.0p 3.0p
Balance Sheet and Leverage 30.09.14 30.06.14
================================ ======== =========== ======== ========== ========== ========
Net tangible asset value
per share 287p 279p
Net asset value per share 336p 327p
Estimated BCBS 270 leverage GBP1,324bn GBP1,353bn
exposure
Capital Management 30.09.14 30.06.14
================================ ======== =========== ======== ========== ========== ========
CRD IV fully loaded
Common equity tier 1 ratio 10.2% 9.9%
Common equity tier 1 capital GBP42.0bn GBP40.8bn
Tier 1 capital GBP46.6bn GBP45.4bn
Risk weighted assets GBP413bn GBP411bn
Estimated BCBS 270 leverage
ratio 3.5% 3.4%
Funding and Liquidity 30.09.14 30.06.14
================================ ======== =========== ======== ========== ========== ========
Group liquidity pool GBP146bn GBP134bn
Estimated CRD IV liquidity
coverage ratio 115% 107%
Loan: deposit ratio(4) 90% 92%
Adjusted Profit Reconciliation
Nine Months Ended 30.09.14 30.09.13
================================ ======== =========== ======== ========== ========== ========
Adjusted profit before tax 4,939 4,717
Own credit 96 (125)
Provisions for PPI and interest rate hedging
redress (910) (2,000)
Gain on US Lehman acquisition assets(1) 461 259
Provision for ongoing investigations
into Foreign Exchange (500) -
Loss on announced sale of the Spanish business(2) (364) -
Statutory profit before
tax 3,722 2,851
1 2013 adjusted income and profit before tax has been restated to exclude the Q213 GBP259m gain relating to assets not yet received from the US Lehman acquisition to aid comparability given its material nature in the current year.
2 The loss on the announced sale of the Spanish business of GBP364m represents a GBP680m impairment of assets in the Spanish businesses agreed for sale subject to completion at or shortly after the end of the year, partially offset by a GBP316m gain on related hedging instruments. There are also accumulated currency translation reserve losses of approximately GBP100m, subject to movements in the EUR exchange rate, which will be recognised on completion.
3 The profit after tax attributable to other equity holders of GBP170m (2013: GBPnil) is offset by a tax credit recorded in reserves of GBP36m (2013: GBPnil). The net amount of GBP134m, along with non-controlling interests (NCI) is deducted from profit after tax in order to calculate earnings per share, return on average tangible shareholders' equity and return on average shareholders' equity.
4 Loan: deposit ratio for PCB, Barclaycard, Africa Banking and Non-Core retail.
Performance Highlights
Barclays Core and Non-Core Barclays Core Barclays Non-Core
Results
=============================== ============================
for the Nine Months Ended 30.09.14 30.09.13(1) 30.09.14 30.09.13
GBPm GBPm % Change GBPm GBPm % Change
================================ ======== =========== ======== ======== ======== ========
Total income net of insurance
claims 18,682 19,414 (4) 1,028 1,843 (44)
Credit impairment charges
and other provisions (1,429) (1,629) 12 (166) (724) 77
================================ ======== =========== ======== ======== ======== ========
Net operating income 17,253 17,785 (3) 862 1,119 (23)
Operating expenses (10,870) (11,764) 8 (1,181) (1,475) 20
Litigation and conduct (194) (104) (87) (115) (60) (92)
Costs to achieve Transform (655) (306) (171) (435) 61
================================ ======== =========== ======== ======== ======== ========
Total operating expenses (11,719) (12,174) 4 (1,467) (1,970) 26
Other net income/(expenses) 53 71 (25) (43) (114) 62
================================ ======== =========== ======== ======== ======== ========
Profit/(loss) before tax 5,587 5,682 (2) (648) (965) 33
Tax charge (1,774) (1,666) (6) 144 161 (11)
================================ ======== =========== ======== ======== ======== ========
Profit/(loss) after tax 3,813 4,016 (5) (504) (804) 37
Non-controlling interests (458) (537) 15 (93) (92) (1)
Other equity interests (129) - (41) -
================================ ======== =========== ======== ======== ======== ========
Attributable profit/(loss) 3,226 3,479 (7) (638) (896) 29
Performance Measures
================================ ======== =========== ======== ======== ========
Return on average tangible
shareholders' equity(2) 12.8% 16.9% (5.4%) (9.2%)
Average allocated tangible GBP34bn GBP27bn GBP14bn GBP17bn
equity (GBPbn)
Return on average shareholders'
equity(2) 10.5% 13.3% (4.2%) (6.7%)
Average allocated equity GBP41bn GBP35bn GBP14bn GBP17bn
(GBPbn)
Cost: income ratio 63% 63% 143% 107%
Basic earnings per share
contribution 20.0p 25.6p (3.9p) (6.6p)
Capital Management 30.09.14 30.06.14 30.09.14 30.06.14
================================ ======== =========== ======== ======== ======== ========
CRD IV fully loaded
Risk weighted assets GBP332bn GBP324bn GBP81bn GBP87bn
30.09.14 30.09.13(1)
Income by Business GBPm GBPm % Change
=============================== ======== =========== ========
Personal and Corporate Banking
(PCB) 6,597 6,557 1
Barclaycard 3,247 3,069 6
Africa Banking(3) 2,701 3,059 (12)
Investment Bank(1) 5,922 6,814 (13)
Head Office 215 (85)
=============================== ======== =========== ========
Barclays Core 18,682 19,414 (4)
Barclays Non-Core 1,028 1,843 (44)
=============================== ======== =========== ========
Barclays Group adjusted
income 19,710 21,257 (7)
30.09.14 30.09.13(1)
Profit/(Loss) Before Tax GBPm GBPm % Change
by Business
=============================== ======== =========== ========
Personal and Corporate Banking
(PCB) 2,257 1,907 18
Barclaycard 1,126 927 21
Africa Banking(3) 756 846 (11)
Investment Bank(1) 1,342 2,156 (38)
Head Office 106 (154)
=============================== ======== =========== ========
Barclays Core 5,587 5,682 (2)
Barclays Non-Core (648) (965) 33
=============================== ======== =========== ========
Barclays Group adjusted
profit before tax 4,939 4,717 5
1 2013 adjusted income and profit before tax has been restated to exclude the Q213 GBP259m gain relating to assets not yet received from the US Lehman acquisition to aid comparability given its material nature in the current year.
2 Return on average equity and average tangible equity for Barclays Non-Core represents its impact on the Group, being the difference between Barclays Group returns and Barclays Core returns. This does not represent the return on average equity and average tangible equity of the Non-Core business.
3 Africa Banking income increased 8% and profit before tax increased 11% on a constant currency basis.
Group Performance Review
Income Statement
Group performance
-- Adjusted profit before tax increased 5% to GBP4,939m as improvements in Personal and Corporate Banking (PCB) and Barclaycard were partly offset by a reduction in the Investment Bank and adverse currency movements in Africa Banking
-- Adjusted income decreased 7% to GBP19,710m whilst impairment reduced by 32% to GBP1,595m, resulting in a 4% decrease in net operating income to GBP18,115m. We anticipate a modest increase in the impairment run rate in Q414, but our expectations are for 2014 full year impairment to be slightly below guidance provided at the 2014 Interim Results
-- Adjusted total operating expenses were down 7% to GBP13,186m, with a reduction in headcount of 7,800 since September 2013, as a result of restructuring savings associated with Transform initiatives, and currency movements. This included costs to achieve Transform of GBP826m (2013: GBP741m) and litigation and conduct charges of GBP309m (2013: GBP164m). Costs to achieve Transform are expected to be GBP1.3bn for 2014 full year, GBP700m in 2015 and GBP200m in 2016
-- Statutory profit before tax was GBP3,722m (2013: GBP2,851m), also reflecting a gain on own credit of GBP96m (2013: loss of GBP125m), an additional GBP910m (2013: GBP2,000m) net provision for PPI and interest rate hedging redress, a gain on US Lehman acquisition assets of GBP461m (2013: GBP259m), a GBP500m provision for ongoing investigations into Foreign Exchange with certain regulatory authorities and a GBP364m loss on the announced sale of the Spanish business
-- The effective tax rate on adjusted profit before tax increased to 33.0% (2013: 31.9%) and the effective tax rate on statutory profit before tax increased to 40.2% (2013: 36.5%)
-- Adjusted Group attributable profit was GBP2,588m (2013: GBP2,583m), resulting in an adjusted Group return on average shareholders' equity of 6.3% (2013: 6.6%)
Core performance
-- Profit before tax remained broadly in line at GBP5,587m (2013: GBP5,682m), as a 38% reduction in the Investment Bank was largely offset by improved performance across the majority of the Core business
-- Income decreased 4% to GBP18,682m, reflecting a reduction in the Investment Bank and a reduction in Africa Banking, due to currency movements, partially offset by growth in Barclaycard and PCB. Investment Bank income was down 13% year to date to GBP5,922m and down 10% to GBP1,665m in Q314 relative to Q313 due to lower Investment Banking fees and lower client volumes in Credit and Equities
- Net interest income of PCB, Barclaycard and Africa Banking increased 4% to GBP8,513m driven by strong savings income growth in PCB and volume growth in Barclaycard, partially offset by a reduction in Africa Banking due to currency movements
-- Credit impairment charges improved 12% to GBP1,429m, reflecting lower impairments across most of the businesses, particularly PCB, due to the improving UK economic environment
-- Total operating expenses decreased 4% to GBP11,719m, reflecting improvements across most of the businesses as a result of savings associated with Transform initiatives partially offset by higher costs to achieve Transform charges of GBP655m (2013: GBP306m) and higher litigation and conduct charges of GBP194m (2013: GBP104m)
-- Attributable profit decreased to GBP3,226m (2013: GBP3,479m) and the Core return on equity decreased to 10.5% (2013: 13.3%), principally as a result of the increased shareholders' equity
Non-Core performance
-- Loss before tax reduced 33% to GBP648m, reflecting:
- Lower income of GBP1,028m (2013: GBP1,843m) following assets and securities run down, and business disposals, partially offset by a GBP119m gain on sale of the UAE retail banking portfolio
- An improvement in impairment of GBP558m to GBP166m
- A 26% reduction in total operating expenses to GBP1,467m due to benefits from Transform cost programmes, including lower non-retail headcount and the effects of the previously announced European retail restructuring, in addition to reduced costs to achieve Transform
-- Non-Core return on equity dilution improved to 4.2% (2013: 6.7%)
Group Performance Review
Balance Sheet and Leverage
Balance sheet
-- Total assets as at 30 September 2014 increased 4% from 30 June 2014 to GBP1,365bn
- Derivative assets increased GBP49bn to GBP383bn, consistent with the movement in derivative liabilities, which increased GBP53bn to GBP379bn, due to an increase in foreign exchange derivatives of GBP36bn, following volatility in the USD market, and an increase in interest rate derivatives of GBP14bn due to a reduction in the major interest rate forward curves
- Reverse repurchase agreements and other similar secured lending decreased GBP14bn to GBP158bn primarily driven by lower matched book trading due to balance sheet deleveraging
-- Total loans and advances remained broadly stable at GBP483bn (June 2014: GBP486bn) primarily due to a GBP14bn reclassification of loans to other assets relating to the Spanish business which are now held for sale, partially offset by a GBP13bn increase in settlement and cash collateral balances, and GBP2bn growth in Barclaycard
-- Customer accounts decreased to GBP442bn (June 2014: GBP444bn) as a result of the reclassification of GBP8bn in relation to the Spanish business to other liabilities, partially offset by GBP5bn higher settlement balances
-- Total shareholders' equity including non-controlling interests was GBP67bn (June 2014: GBP65bn). Excluding non-controlling interests, shareholders' equity increased to GBP60bn (June 2014: GBP58bn), reflecting a GBP0.8bn increase in the translation reserve as GBP weakened against USD and an increase in retained earnings of GBP0.5bn
-- Net asset value per share increased to 336p (June 2014: 327p) and net tangible asset value per share was 287p (June 2014: 279p)
Leverage exposure
-- The estimated Basel Committee on Banking Supervision (BCBS) 270 leverage exposure decreased to GBP1,324bn (June 2014: GBP1,353bn) primarily driven by a reduction in reverse repurchase agreements and derivative exposures
Capital Management
-- The fully loaded CRD IV CET1 ratio increased to 10.2% (June 2014: 9.9%) primarily due to an increase in the fully loaded CRD IV CET1 capital of GBP1.3bn to GBP42.0bn. Excluding the loss on the announced sale of the Spanish business, profits in the period generated GBP0.8bn of CET1 capital. RWAs remained broadly stable at GBP413bn (June 2014: GBP411bn), with growth across Core businesses, partially offset by a decrease in Non-Core. Subject to completion, the announced Spanish business sale would result in an increase in the CRD IV fully loaded CET1 ratio to 10.4% as at 30 September 2014
-- The estimated BCBS 270 leverage ratio increased to 3.5% (June 2014: 3.4%), reflecting the reduction in the estimated BCBS 270 leverage exposure of GBP29bn to GBP1,324bn and an increase in Tier 1 capital of GBP1.2bn to GBP46.6bn. Subject to completion, the announced sale of the Spanish businesses is expected to increase the estimated BCBS 270 leverage ratio by 2bps
Group Performance Review
Funding and Liquidity
-- The Group strengthened its liquidity position further during the quarter, building a larger surplus to its Liquidity Risk Appetite. This resulted in an increase in the Group liquidity pool to GBP146bn (June 2014: GBP134bn). The estimated CRD IV Liquidity Coverage Ratio (LCR) increased to 115% (June 2014: 107%), equivalent to a surplus of GBP20bn (June 2014: GBP9bn)
-- The Group funding profile remained stable and well diversified. Wholesale funding outstanding (excluding repurchase agreements) was GBP178bn (June 2014: GBP179bn). The Group issued GBP4bn of term funding net of early redemptions during the quarter taking total net issuance in 2014 to GBP14bn, excluding the GBP6bn participation in the Bank of England's Funding for Lending Scheme. Barclays has GBP4bn of term funding maturing in the remainder of 2014 and GBP23bn in 2015
Other Matters
-- A GBP500m provision has been recognised relating to ongoing investigations into Foreign Exchange with certain regulatory authorities disclosed in the 2014 Half Year Results Announcement's Legal, Competition and Regulatory Matters note
-- A gain of GBP461m has been recognised reflecting greater certainty around the recoverability of assets not yet received from the 2008 US Lehman acquisition. This gain follows a favourable ruling during the quarter from the US Court of Appeals for the Second Circuit
-- As at 30 September 2014 the provision for PPI redress was GBP1.2bn (June 2014: GBP1.3bn) following Q314 utilisation of GBP291m and the recognition of an additional amount of GBP170m based on an updated estimate of future redress and associated costs. The remaining provision reflects Barclays' best current estimate of future costs
-- As at 30 September 2014 the provision for interest rate hedging product redress was GBP295m (June 2014: GBP648m) after Q314 utilisation of GBP193m and a provision release of GBP160m. The release has been recognised as the review is now substantially complete with redress outcomes communicated to 99% of customers covered by the redress exercise
Dividends
-- A third interim dividend of 1.0p will be paid on 12 December 2014
Outlook
-- 2014 continues to be a transition year as we invest in the business and focus on balance sheet optimisation and cost reduction, while addressing ongoing regulatory and litigation issues
Tushar Morzaria, Group Finance Director
Results by Business
Personal and Corporate Banking Nine Months Nine Months
Ended Ended
30.09.14 30.09.13
Income Statement Information GBPm GBPm % Change
==================================== ============== ============== ========
Total income 6,597 6,557 1
Credit impairment charges and other
provisions (359) (451) 21
==================================== ============== ============== ========
Net operating income 6,238 6,106 2
Operating expenses (3,786) (4,072) 7
Costs to achieve Transform (205) (165) (24)
==================================== ============== ============== ========
Total operating expenses (3,991) (4,237) 6
Other net income 10 38 (74)
==================================== ============== ============== ========
Profit before tax 2,257 1,907 18
Attributable profit 1,617 1,399 16
As at 30.09.14 As at 30.06.14
Balance Sheet Information GBPbn GBPbn
==================================== ============== ============== ========
Loans and advances to customers
at amortised cost 215.7 216.7
Total assets 275.7 268.1
Customer deposits 295.9 298.3
Risk weighted assets 120.0 117.9
Performance Measures 30.09.14 30.09.13
==================================== ============== ==============
Return on average tangible equity 16.7% 14.1%
Average allocated tangible equity
(GBPbn) 13.0 13.2
Return on average equity 12.5% 10.8%
Average allocated equity (GBPbn) 17.3 17.3
Cost: income ratio 60% 65%
Loan loss rate (bps) 22 28
2014 compared to 2013
-- Total income increased 1% to GBP6,597m driven by improved savings margins and mortgage income growth, partially offset by lower fee income
- Net interest margin improved by 8bps to 2.99% driven primarily by savings in personal banking partially offset by lower corporate banking lending margins
-- Credit impairment charges improved 21% to GBP359m due to the improving economic environment in the UK. Corporate banking benefitted from higher levels of provision releases and recoveries in the UK
-- Total operating expenses reduced 6% to GBP3,991m reflecting benefits from Transform programmes, including headcount reductions, partially offset by increased costs to achieve Transform of GBP205m (2013: GBP165m)
-- Profit before tax increased 18% to GBP2,257m
Q314 compared to Q214
-- Profit before tax remained stable at GBP789m (Q214: GBP780m) with higher income in personal banking and reduced operating expenses, due to benefits from Transform programmes, offset by higher costs to achieve Transform of GBP90m (Q214: GBP58m)
-- Loans and advances to customers reduced GBP1.0bn to GBP215.7bn due to lower working capital requirements from corporate banking customers, partially offset by mortgage growth
-- Total assets increased 3% to GBP275.7bn due to an increase in liquidity pool assets, partially offset by the net decrease in loans and advances to customers
-- Customer deposits reduced GBP2.4bn to GBP295.9bn due to reduced corporate banking client deposit balances in the UK, partially offset by inflows in current accounts
-- RWAs increased GBP2.1bn to GBP120.0bn primarily driven by increases in mortgage balances and corporate banking undrawn commitments
Results by Business
Barclaycard Nine Months Nine Months
Ended Ended
30.09.14 30.09.13
Income Statement Information GBPm GBPm % Change
==================================== ============== ============== ========
Total income 3,247 3,069 6
Credit impairment charges and other
provisions (821) (830) 1
==================================== ============== ============== ========
Net operating income 2,426 2,239 8
Operating expenses (1,271) (1,329) 4
Costs to achieve Transform (68) (11)
==================================== ============== ============== ========
Total operating expenses (1,339) (1,340) -
Other net income 39 28 39
==================================== ============== ============== ========
Profit before tax 1,126 927 21
Attributable profit 801 653 23
As at 30.09.14 As at 30.06.14
Balance Sheet Information GBPbn GBPbn
==================================== ============== ============== ========
Loans and advances to customers
at amortised cost 34.8 33.2
Total assets 38.9 36.2
Customer deposits 6.5 5.9
Risk weighted assets 38.6 37.7
Performance Measures 30.09.14 30.09.13
==================================== ============== ============== ========
Return on average tangible equity 23.0% 21.2%
Average allocated tangible equity
(GBPbn) 4.7 4.1
Return on average equity 18.5% 16.5%
Average allocated equity (GBPbn) 5.8 5.3
Cost: income ratio 41% 44%
Loan loss rate (bps) 301 347
2014 compared to 2013
-- Total income increased 6% to GBP3,247m reflecting continued net lending growth across all geographies and lower funding costs, partially offset by depreciation of USD against GBP
- Net interest margin remained broadly stable at 8.98% (2013: 9.04%) as the impact of promotional offers and a change in product mix was offset by lower funding costs
-- Credit impairment charges remained in line at GBP821m (2013: GBP830m) despite volume growth. Favourable performance, as reflected by falling 30 day delinquency rates in the UK and US consumer cards businesses, resulted in loan loss rates reducing by 46bps to 301bps
-- Total operating expenses remained flat at GBP1,339m (2013: GBP1,340m). The impact of volume growth and higher costs to achieve Transform was offset by depreciation of USD against GBP and VAT refunds
-- Profit before tax increased 21% to GBP1,126m
Q314 compared to Q214
-- Profit before tax reduced 9% to GBP362m driven by higher operating expenses due to the non-recurrence of a VAT refund in the prior quarter and higher costs to achieve Transform
-- Total loans and advances to customers increased 5% to GBP34.8bn reflecting growth across all geographies
-- Total assets increased 7% to GBP38.9bn due to the increase in loans and advances to customers and an increase in liquidity pool assets
-- Customer deposits increased 10% to GBP6.5bn driven by funding initiatives in the US
-- RWAs increased GBP0.9bn to GBP38.6bn primarily driven by growth in loans and advances to customers
Results by Business
Africa Banking Constant Currency(1)
Nine Months Nine Months Nine Months Nine Months
Ended Ended Ended Ended
30.09.14 30.09.13 30.09.14 30.09.13
Income Statement Information GBPm GBPm % Change GBPm GBPm % Change
============================== ============== ============== ======== ============== ============== ========
Total income net of insurance
claims 2,701 3,059 (12) 3,297 3,059 8
Credit impairment charges
and other provisions (270) (375) 28 (332) (375) 11
============================== ============== ============== ======== ============== ============== ========
Net operating income 2,431 2,684 (9) 2,965 2,684 10
Operating expenses (1,655) (1,835) 10 (2,004) (1,835) (9)
Costs to achieve Transform (28) (11) (34) (11)
============================== ============== ============== ======== ============== ============== ========
Total operating expenses (1,683) (1,846) 9 (2,038) (1,846) (10)
Other net income 8 8 - 9 8 13
============================== ============== ============== ======== ============== ============== ========
Profit before tax 756 846 (11) 936 846 11
Attributable profit 272 325 (16) 368 325 13
As at 30.09.14 As at 30.06.14 As at 30.09.14 As at 30.06.14
Balance Sheet Information GBPbn GBPbn GBPbn GBPbn
============================== ============== ============== ======== ============== ============== ========
Loans and advances to
customers at amortised
cost 34.5 33.8 34.8 33.8
Total assets 54.6 52.4 55.2 52.4
Customer deposits 33.4 33.2 33.6 33.2
Risk weighted assets 37.9 36.5
Performance Measures 30.09.14 30.09.13
============================== ========
Return on average tangible
equity 13.2% 13.3%
Average tangible equity
(GBPbn) 2.7 3.3
Return on average equity 9.6% 9.6%
Average equity (GBPbn) 3.8 4.5
Cost: income ratio 62% 60%
Loan loss rate (bps) 97 130
2014 compared to 2013
-- Based on average rates, the ZAR depreciated against GBP by 22% in 2014. The deterioration was a significant contributor to the movement in the reported results of Africa Banking
-- Total income declined 12% to GBP2,701m. On a constant currency basis, total income increased 8% reflecting higher net interest income, with continued strong Corporate and Investment Banking (CIB) asset growth and the net interest margin increasing to 5.96% (2013: 5.78%). Non-interest income increased reflecting growth in Retail and Business Banking (RBB)
-- Credit impairment charges decreased 28% to GBP270m. On a constant currency basis, credit impairment charges reduced 11% driven by improvements in the South Africa mortgages portfolio, partially offset by increased provisions in the Card portfolio. The loan loss rate improved from 130bps to 97bps
-- Total operating expenses decreased 9% to GBP1,683m. On a constant currency basis, operating expenses increased 10% largely reflecting inflationary increases, higher staff and marketing costs, increased investment spend on key initiatives and higher costs to achieve Transform
-- Profit before tax decreased 11% to GBP756m. On a constant currency basis, profit before tax increased 11%
Q314 compared to Q214
-- The closing and average ZAR rates against GBP remained broadly stable to Q214
-- Profit before tax increased to GBP272m (Q214: GBP244m) primarily reflecting improved income and lower impairment in RBB
-- Loans and advances to customers increased 2% to GBP34.5bn primarily reflecting growth in CIB
-- Total assets increased 4% to GBP54.6bn due to the increase in loans and advances to customers and an increase in CIB trading assets
-- Customer deposits increased 1% to GBP33.4bn mainly reflecting continued growth in deposits in RBB
-- RWAs increased GBP1.4bn to GBP37.9bn primarily reflecting loans and advances growth
1 Constant currency results are calculated by converting ZAR results into GBP using the average exchange rate for the nine months ended 30 September 2013 for the income statement and the 30 June 2014 exchange rate for the balance sheet to eliminate the impact of movement in exchange rates between the two periods.
Results by Business
Nine Months Nine Months
Investment Bank Ended Ended(1)
30.09.14 30.09.13
Income Statement Information GBPm GBPm % Change
================================== ============== ================= ========
Investment Banking fees 1,584 1,589 -
Lending 306 257 19
================================== ============== ================= ========
Banking 1,890 1,846 2
Credit(2) 871 1,026 (15)
Equities 1,615 1,876 (14)
Macro(2) 1,526 2,086 (27)
================================== ============== ================= ========
Markets 4,012 4,988 (20)
================================== ============== ================= ========
Banking & Markets 5,902 6,834 (14)
Other(1) 20 (20)
================================== ============== ================= ========
Total income 5,922 6,814 (13)
Credit impairment releases and
other provisions 21 28 (25)
================================== ============== ================= ========
Net operating income 5,943 6,842 (13)
Operating expenses (4,249) (4,566) 7
Costs to achieve Transform (352) (120)
================================== ============== ================= ========
Total operating expenses (4,601) (4,686) 2
Profit before tax 1,342 2,156 (38)
Attributable profit 547 1,381 (60)
As at 30.09.14 As at 30.06.14(1)
Balance Sheet Information GBPbn GBPbn
================================== ============== ================= ========
Loans and advances to banks and
customers at amortised cost 123.1 117.2
Trading portfolio assets 98.8 101.2
Derivative financial instrument
assets 131.4 104.2
Reverse repurchase agreements and
other similar secured lending 82.8 83.0
Total assets(1) 488.4 446.2
Risk weighted assets(1) 127.9 123.9
Performance Measures 30.09.14 30.09.13(1)
================================== ============== ================= ========
Return on average tangible equity 5.1% 11.8%
Average allocated tangible equity
(GBPbn) 14.6 15.6
Return on average equity 4.9% 11.4%
Average allocated equity (GBPbn) 15.3 16.2
Cost: income ratio 78% 69%
2014compared to 2013
-- Total income decreased 13% to GBP5,922m or 6% if reported in USD(3)
- Banking income increased 2% to GBP1,890m. Within Banking, Investment Banking fee income is in line with prior year at GBP1,584m (2013: GBP1,589m) driven by increased financial advisory and equity underwriting fees, offset by lower debt underwriting fee income. Lending income increased 19% to GBP306m driven by lower risk management losses and higher net interest and fee income
- Markets income decreased 20% to GBP4,012m
- Credit decreased 15% to GBP871m driven by lower income in high yield and high grade products, predominantly in the US
- Equities decreased 14% to GBP1,615m due to declines in US cash equities and global equity derivatives, reflecting lower client volumes partially offset by higher income in equity financing
- Macro decreased 27% to GBP1,526m reflecting subdued client activity in rates and lower volatility in H114 currency markets
-- Net credit impairment release of GBP21m (2013: GBP28m) arose from a number of single name exposures
-- Total operating expenses decreased 2% to GBP4,601m including a reduction due to foreign currency movements, partially offset by increased costs to achieve Transform of GBP352m (2013: GBP120m) and litigation and conduct charges. Excluding these items, operating expenses decreased 3%, reflecting lower compensation costs and benefits from Transform programmes, including business restructuring and operational streamlining
-- Profit before tax decreased 38% to GBP1,342m
1 2013 adjusted income and profit before tax has been restated to exclude the Q213 GBP259m gain relating to assets not yet received from the US Lehman acquisition to aid comparability given its material nature in the current year. In addition, June 2014 US Lehman acquisition assets and RWAs of GBP1.6bn have been restated for the reclassification of these assets from the Investment Bank to Head Office to more accurately reflect responsibility for the resolution of this matter.
2 Macro represents Rates, Currencies and Commodities income. Credit represents Credit, Securitised Products and Municipals income.
3 USD variance representing monthly spot rate conversion of GBP results has been included to aid comparison to US peer banks.
Results by Business
Q314 compared to Q313
-- Total income decreased 10% to GBP1,665m or 5% if reported in USD
- Banking income decreased 4% to GBP547m. Within Banking, Investment Banking fee income decreased 22% to GBP410m driven by decreased financial advisory and debt underwriting fee income. Equity underwriting fee income remained broadly in line. Lending income increased to GBP137m (Q313: GBP42m) driven by lower risk management losses in the prior year
- Markets income decreased 13% to GBP1,120m
- Credit decreased 17% to GBP255m driven by declines in high yield and high grade products in the US
- Equities decreased 25% to GBP395m due to declines in US cash equities and global equity derivatives, partially offset by higher income in equity financing
- Macro increased 3% to GBP470m reflecting stronger performance in currencies due to higher volatility, partially offset by decreased client activity in rates
-- Total operating expenses remained in line at GBP1,376m (Q313: GBP1,376m) due to savings from Transform programmes and favourable currency movements, offset by higher costs to achieve Transform
-- Profit before tax decreased to GBP284m (Q313: GBP465m)
Q314 compared to Q214
-- Total income decreased 23% to GBP1,665m
- Banking income decreased 25% to GBP547m. Within Banking, Investment Banking fee income decreased 38% to GBP410m driven by decreased equity and debt underwriting, and financial advisory fee income. Lending income increased to GBP137m (Q214: GBP66m) driven by lower risk management losses in the prior quarter
- Markets income decreased 20% to GBP1,120m
- Credit decreased 6% to GBP255m driven by declines across high yield and high grade products in the US
- Equities decreased 37% to GBP395m due to declines in cash equities and equity derivatives
- Macro decreased 7% to GBP470m as decreased client activity in rates was partially offset by stronger performance in currencies due to higher volatility
-- Total operating expenses decreased 14% to GBP1,376m due to lower litigation and conduct charges, savings from Transform programmes and lower costs to achieve Transform
-- Profit before tax decreased to GBP284m (Q214: GBP567m)
-- Loans and advances to banks and customers increased 5% to GBP123.1bn due to increased settlement balances
-- Derivative financial instrument assets increased 26% to GBP131.4bn driven by decreases in major interest rate forward curves and strengthening of USD against GBP
-- Reverse repurchase agreements and other similar secured lending were in line at GBP82.8bn (June 2014: GBP83.0bn)
-- Total assets increased 9% to GBP488.4bn due to movements in derivatives financial instrument assets, loans and advances to banks and customers and an increase in allocation of the Group liquidity pool assets
-- RWAs increased GBP4.0bn to GBP127.9bn primarily driven by an increase in loans and advances to customers and the downgrade of Russian counterparties
Results by Business
Head Office Nine Months Ended Nine Months Ended
30.09.14 30.09.13
Income Statement Information GBPm GBPm
=============================== ================= =================
Net operating income/(expense) 215 (85)
Operating expenses (104) (65)
Costs to achieve Transform (2) -
=============================== ================= =================
Total operating expenses (106) (65)
Other net expense (3) (4)
=============================== ================= =================
Profit/(loss) before tax 106 (154)
Attributable loss (11) (279)
As at 30.09.14 As at 30.06.14(1)
Balance Sheet Information GBPbn GBPbn
=============================== ================= =================
Total assets(1) 41.5 43.3
Risk weighted assets(1) 7.5 7.6
2014 compared to 2013
-- Net operating income increased to GBP215m (2013: expense of GBP85m) predominately due to the residual income from treasury operations and a net gain of GBP69m from foreign exchange recycling arising from the restructure of group subsidiaries
-- Total operating expenses increased GBP41m to GBP106m, mainly due to litigation and conduct charges, partially offset by the non-recurrence of costs associated with the Salz Review and establishment of the Transform programme in the prior year
-- Profit before tax of GBP107m moved from a loss of GBP154m in 2013
Q314 compared to Q214
-- Profit before tax increased to GBP40m (Q214: GBP6m) driven by lower operating expenses, mainly due to litigation and conduct charges in the prior quarter
-- Total assets remained broadly stable at GBP41.5bn (June 2014: GBP43.3bn)
-- RWAs remained in line at GBP7.5bn (June 2014: GBP7.6bn), with an increase relating to the US Lehman acquisition assets offset by a reduction due to a greater proportion of high quality sovereign assets
1 June 2014 US Lehman acquisition assets and RWAs of GBP1.6bn have been restated for the reclassification of these assets from the Investment Bank to Head Office to more accurately reflect responsibility for the resolution of this matter.
Results by Business
Barclays Non-Core Nine Months Nine Months
Ended Ended
30.09.14 30.09.13
Income Statement Information GBPm GBPm % Change
==================================== ============== ============== ========
Businesses 876 1,175 (25)
Securities and Loans 251 604 (58)
Derivatives (99) 64
==================================== ============== ============== ========
Total income 1,028 1,843 (44)
Credit impairment charges and other
provisions (166) (724) 77
==================================== ============== ============== ========
Net operating income 862 1,119 (23)
Operating expenses (1,296) (1,535) 16
Costs to achieve Transform (171) (435) 61
==================================== ============== ============== ========
Total operating expenses (1,467) (1,970) 26
Other net expense (43) (114) 62
==================================== ============== ============== ========
Loss before tax (648) (965) 33
Attributable loss (638) (896) 29
As at 30.09.14 As at 30.06.14
Balance Sheet Information GBPbn GBPbn
==================================== ============== ============== ========
Loans and advances to banks and
customers at amortised cost 64.5 75.5
Loans and advances to customers
at fair value 18.1 17.0
Trading portfolio assets 19.2 22.9
Derivative financial instrument
assets 249.6 227.0
Reverse repurchase agreements and
other similar secured lending 73.9 86.8
Total assets 466.5 468.6
Customer deposits 22.2 28.6
Risk weighted assets 81.0 87.5
Performance Measures 30.09.14 30.09.13
==================================== ============== ============== ========
Return on average tangible equity
impact(1) (5.4%) (9.2%)
Average allocated tangible equity
(GBPbn) 13.6 17.1
Return on average equity impact(1) (4.2%) (6.7%)
Average allocated equity (GBPbn) 13.8 17.4
Cost: income ratio 143% 107%
2014 compared to 2013
-- Total income reduced 44% to GBP1,028m
- Businesses income reduced 25% to GBP876m primarily driven by reduced investment banking activity, as assets are run down, adverse foreign currency movements and rationalisation of product offerings within the European retail business
- Securities and Loans income decreased 58% to GBP251m primarily driven by the active rundown of securities, fair value adjustments on wholesale loan portfolios and non-recurrence of prior year favourable market movements on certain securitised products, partially offset by a GBP119m gain on the sale of the UAE retail banking portfolio
- Derivative income reduced GBP163m to an expense of GBP99m reflecting the funding costs of the pre-CRD IV rates portfolio, hedging activities and the non-recurrence of fair value gains in the prior year
- As run down activity progresses, 2015 income is expected to reduce significantly from current levels
-- Credit impairment charges improved 77% to GBP166m driven by the non-recurrence of a single name exposure, lower charges on the wholesale portfolio, including actions to reduce exposure to the Spanish property and construction sectors, and improved underlying performance in Europe
-- Total operating expenses improved 26% to GBP1,467m reflecting a 16% reduction in operating expenses due to benefits from Transform programmes, including non-retail headcount reductions and results of the previously announced European retail restructuring. In addition, costs to achieve Transform were 61% lower
-- Loss before tax reduced 33% to GBP648m
1 Return on average equity and average tangible equity for Barclays Non-Core represents its impact on the Group. This does not represent the return on average equity and average tangible equity of the Non-Core business.
Results by Business
Q314 compared to Q214
-- Total income increased 30% to GBP370m
- Businesses income increased 34% to GBP328m primarily driven by fair value gains and sale proceeds as part of the exit strategy
- Securities and Loans income increased to GBP103m (Q214: GBP48m), driven by income from commodities and foreign exchange trading, and a GBP119m gain on the sale of the UAE retail banking portfolio, partially offset by fair value adjustments on wholesale loan portfolios
- Derivative income reduced GBP53m to an expense of GBP61m due to a decline in trading income leaving a residual funding cost
-- Credit impairment charges improved 79% to GBP17m driven by debt sales and provision releases within non-retail businesses
-- Total operating expenses increased 14% to GBP533m due to increased costs to achieve Transform of GBP130m (Q214: GBP17m), partially offset by 11% lower operating expenses due to benefits from the run down of non-retail businesses and from Transform programmes
-- Loss before tax reduced 53% to GBP157m
-- Loans and advances to banks and customers decreased 15% to GBP64.5bn due to a GBP14.0bn reclassification of loans relating to the Spanish business which are now held for sale
-- Total assets remained broadly stable at GBP466.5bn (June 2014: GBP468.6bn) with reduced reverse repurchase agreements and trading portfolio assets offset by an increase in derivative financial instrument assets
-- RWAs reduced GBP6.5bn to GBP81.0bn mainly driven by securities disposals and disposals of businesses, including the UAE retail banking portfolio
Appendix I - Quarterly Results Summary
Q314 Q214 Q114 Q413 Q313 Q213 Q113 Q412
=====================================
Barclays Results by Quarter(1) GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Adjusted basis
Total income net of insurance
claims 6,378 6,682 6,650 6,639 6,445 7,078 7,734 6,867
Credit impairment charges
and other provisions (509) (538) (548) (718) (722) (925) (706) (825)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 5,869 6,144 6,102 5,921 5,723 6,153 7,028 6,042
Operating expenses (3,977) (4,188) (4,195) (4,777) (4,262) (4,359) (4,782) (4,345)
Costs to achieve Transform (332) (254) (240) (468) (101) (126) (514) -
UK bank levy - - - (504) - - - (345)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total operating expenses (4,309) (4,442) (4,435) (5,749) (4,363) (4,485) (5,296) (4,690)
Other net income/(expense) 30 (46) 26 19 25 (122) 54 43
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Adjusted profit before tax 1,590 1,656 1,693 191 1,385 1,546 1,786 1,395
Adjusting items
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Own credit 44 (67) 119 (95) (211) 337 (251) (560)
Provisions for PPI and interest
rate hedging redress (10) (900) - - - (2,000) - (1,000)
Goodwill impairment - - - (79) - - - -
Gain on US Lehman acquisition
assets 461 - - - - 259 - -
Provision for ongoing investigations
into Foreign Exchange (500) - - - - - - -
Loss on announced sale of
the Spanish business (364) - - - - - - -
Statutory profit/(loss)
before tax 1,221 689 1,812 17 1,174 142 1,535 (165)
Statutory profit/(loss)
after tax 620 391 1,215 (514) 728 39 1,044 (364)
Attributable to:
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Ordinary equity holders
of the parent 379 161 965 (642) 511 (168) 839 (589)
Other equity holders 80 41 49 - - - - -
Non-controlling interests 161 189 201 128 217 207 205 225
Adjusted basic earnings/(loss)
per share 5.2p 5.4p 5.5p (2.8p) 5.4p 7.7p 7.5p 6.7p
Adjusted cost: income ratio 68% 66% 67% 87% 68% 63% 68% 68%
Basic earnings/(loss) per
share 2.4p 1.0p 6.0p (4.5p) 3.8p (1.2p) 6.3p (4.5p)
Cost: income ratio 70% 82% 66% 89% 70% 85% 71% 90%
Barclays Core(1)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total income net of insurance
claims 6,008 6,397 6,277 6,189 6,076 6,514 6,824 6,115
Credit impairment charges
and other provisions (492) (456) (481) (542) (554) (558) (517) (600)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 5,516 5,941 5,796 5,647 5,522 5,956 6,307 5,515
Operating expenses (3,573) (3,738) (3,753) (4,114) (3,776) (3,853) (4,239) (3,844)
Costs to achieve Transform (202) (237) (216) (365) (84) (64) (158) -
UK bank levy - - - (395) - - - (263)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total operating expenses (3,775) (3,975) (3,969) (4,874) (3,860) (3,917) (4,397) (4,107)
Other net income 6 27 20 15 15 13 43 21
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Profit before tax 1,747 1,993 1,847 788 1,677 2,052 1,953 1,429
Barclays Non-Core
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total income net of insurance
claims 370 285 373 450 368 564 911 752
Credit impairment charges
and other provisions (17) (82) (67) (176) (168) (367) (189) (226)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 353 203 306 274 200 197 722 526
Operating expenses (403) (451) (442) (664) (485) (507) (542) (500)
Costs to achieve Transform (130) (17) (24) (103) (17) (62) (356) -
UK bank levy - - - (109) - - - (82)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total operating expenses (533) (468) (466) (876) (502) (569) (898) (582)
Other net income/(expense) 23 (72) 6 4 10 (135) 11 21
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Loss before tax (157) (337) (154) (598) (292) (507) (165) (35)
1 2013 adjusted income and profit before tax has been restated to exclude the Q213 GBP259m gain relating to assets not yet received from the US Lehman acquisition to aid comparability given its material nature in the current year.
Appendix I - Quarterly Results Summary
Q314 Q214 Q114 Q413 Q313 Q213 Q113 Q412
Personal and Corporate Banking GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total income 2,236 2,188 2,173 2,166 2,252 2,192 2,113 2,153
Credit impairment charges
and other provisions (129) (95) (135) (169) (153) (165) (134) (191)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 2,107 2,093 2,038 1,997 2,099 2,027 1,979 1,962
Operating expenses (1,232) (1,256) (1,298) (1,388) (1,318) (1,378) (1,376) (1,337)
Costs to achieve Transform (90) (58) (57) (219) (73) (55) (37) -
UK bank levy - - - (66) - - - (49)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total operating expenses (1,322) (1,314) (1,355) (1,673) (1,391) (1,433) (1,413) (1,386)
Other net income 4 1 5 3 1 7 30 3
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Profit before tax 789 780 688 327 709 601 596 579
Barclaycard
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total income 1,123 1,082 1,042 1,034 1,050 1,030 989 987
Credit impairment charges
and other provisions (284) (268) (269) (266) (290) (272) (268) (265)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 839 814 773 768 760 758 721 722
Operating expenses (449) (420) (402) (457) (455) (424) (450) (472)
Costs to achieve Transform (32) (23) (13) (38) (6) (5) - -
UK bank levy - - - (22) - - - (15)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total operating expenses (481) (443) (415) (517) (461) (429) (450) (487)
Other net income 4 25 10 5 12 7 9 5
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Profit before tax 362 396 368 256 311 336 280 240
Africa Banking
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total income net of insurance
claims 928 895 878 980 1,004 1,016 1,039 1,064
Credit impairment charges
and other provisions (74) (100) (96) (104) (101) (131) (143) (164)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 854 795 782 876 903 885 896 900
Operating expenses (573) (545) (537) (616) (605) (597) (633) (605)
Costs to achieve Transform (11) (8) (9) (15) (2) (9) - -
UK bank levy - - - (42) - - - (34)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total operating expenses (584) (553) (546) (673) (607) (606) (633) (639)
Other net income 2 2 4 - 3 4 1 12
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Profit before tax 272 244 240 203 299 283 264 273
Investment Bank(1)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Investment Banking fees 410 661 513 571 526 488 575 621
Lending 137 66 103 68 42 141 74 42
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Banking 547 727 616 639 568 629 649 663
Credit 255 270 346 231 308 239 479 248
Equities 395 629 591 421 524 750 602 419
Macro 470 504 552 494 457 689 940 609
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Markets 1,120 1,403 1,489 1,146 1,289 1,678 2,021 1,276
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Banking & Markets 1,667 2,130 2,105 1,785 1,857 2,307 2,670 1,939
Other (2) 24 (2) (3) (6) (7) (7) (8)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total income 1,665 2,154 2,103 1,782 1,851 2,300 2,663 1,931
Credit impairment (charges)/releases
and other provisions (5) 7 19 (6) (10) 10 28 21
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 1,660 2,161 2,122 1,776 1,841 2,310 2,691 1,952
Operating expenses (1,306) (1,442) (1,501) (1,606) (1,373) (1,429) (1,764) (1,360)
Costs to achieve Transform (70) (152) (130) (71) (3) - (116) -
UK bank levy - - - (236) - - - (139)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total operating expenses (1,376) (1,594) (1,631) (1,913) (1,376) (1,429) (1,880) (1,499)
Profit/(loss) before tax 284 567 491 (137) 465 881 811 453
Head Office
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total income/(expense) 56 78 81 227 (81) (24) 20 (20)
Credit impairment releases/(charges)
and other provisions - - - 3 - - - (1)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income/(expense) 56 78 81 230 (81) (24) 20 (21)
Operating expenses (13) (76) (15) (47) (25) (25) (16) (70)
Costs to achieve Transform - 5 (7) (22) - 5 (5) -
UK bank levy - - - (29) - - - (26)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total operating expenses (13) (71) (22) (98) (25) (20) (21) (96)
Other net (expense)/income (3) (1) 1 7 (1) (5) 3 1
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Profit/(loss) before tax 40 6 60 139 (107) (49) 2 (116)
1 2013 adjusted income and profit before tax has been restated to exclude the Q213 GBP259m gain relating to assets not yet received from the US Lehman acquisition to aid comparability given its material nature in the current year.
Appendix II - Performance Management
Returns and Equity by Business
Returns on average equity and average tangible equity are calculated as annualised profit for the period attributable to ordinary equity holders of the parent (adjusted for the offset by the tax credit recorded in reserves in respect of coupons on other equity instruments) divided by average allocated equity or average allocated tangible equity for the period as appropriate, excluding non-controlling and other equity interests for businesses, apart from Africa Banking (see below). Average allocated equity has been calculated as 10.5% of average CRD IV fully loaded risk weighted assets for each business, adjusted for CRD IV fully loaded capital deductions, including goodwill and intangible assets, reflecting the assumptions the Group uses for capital planning purposes. The excess of allocated Group equity, reflecting CRD IV fully loaded Common Equity Tier 1 capital ratio of 10.2% as at 30 September 2014 being below 10.5%, is allocated as negative equity to Head Office and Other Operations. Average allocated tangible equity is calculated using the same method but excludes goodwill and intangible assets.
For Africa Banking the equity used for return on average equity is Barclays share of the statutory equity of the BAGL entity (together with that of the Barclays Egypt and Zimbabwe businesses which remain outside the BAGL corporate entity), as well as the Barclays' goodwill on acquisition of these businesses. The tangible equity for return on tangible equity uses the same basis but excludes both the Barclays' goodwill on acquisition and the goodwill and intangibles held within the BAGL statutory equity.
Nine Months Ended Nine Months Ended
30.09.14 30.09.13(1)
Return on Average Equity % %
================================== ================= =================
Personal and Corporate Banking 12.5 10.8
Barclaycard 18.5 16.5
Africa Banking 9.6 9.6
Investment Bank 4.9 11.4
================================== ================= =================
Barclays Core excluding Head
Office 10.3 11.6
Head Office impact(2) 0.2 1.7
Barclays Core 10.5 13.3
Barclays Non-Core impact(2) (4.2) (6.7)
================================== ================= =================
Barclays Group adjusted total 6.3 6.6
Nine Months Ended Nine Months Ended
30.09.14 30.09.13(1)
Return on Average Tangible Equity %%
================================== ================= ================
Personal and Corporate Banking 16.7 14.1
Barclaycard 23.0 21.2
Africa Banking 13.2 13.3
Investment Bank 5.1 11.8
================================== ================= =================
Barclays Core excluding Head
Office 12.4 13.9
Head Office impact(2) 0.4 3.0
Barclays Core 12.8 16.9
Barclays Non-Core impact(2) (5.4) (9.2)
================================== ================= =================
Barclays Group adjusted total 7.4 7.7
1 2013 adjusted income and profit before tax has been restated to exclude the Q213 GBP259m gain relating to assets not yet received from the US Lehman acquisition to aid comparability given its material nature in the current year.
2 Return on average equity and average tangible equity for Head Office and Barclays Non-Core represents their impact on Barclays Core and the Group respectively. This does not represent the return on average equity and average tangible equity of Head Office or the Non-Core business.
Appendix II - Performance Management
Nine Months Ended Nine Months Ended
30.09.14 30.09.13(1)
Profit/(Loss) Attributable to GBPm GBPm
Ordinary Equity Holders of the
Parent(2)
================================ ================= =================
Personal and Corporate Banking 1,629 1,399
Barclaycard 805 653
Africa Banking 272 325
Investment Bank 559 1,381
Head Office (11) (279)
================================ ================= =================
Barclays Core 3,254 3,479
Barclays Non-Core (629) (896)
================================ ================= =================
Barclays Group adjusted total 2,625 2,583
Average Allocated Equity
====================================
Nine Months Ended Nine Months Ended
30.09.14 30.09.13
GBPbn GBPbn
================================ ================= =================
Personal and Corporate Banking 17.3 17.3
Barclaycard 5.8 5.3
Africa Banking 3.8 4.5
Investment Bank 15.3 16.2
Head Office(3) (0.8) (8.3)
================================ ================= =================
Barclays Core 41.4 35.0
Barclays Non-Core 13.8 17.4
================================ ================= =================
Barclays Group adjusted total 55.2 52.4
Average Allocated Tangible Equity
====================================
Nine Months Ended Nine Months Ended
30.09.14 30.09.13
GBPbn GBPbn
================================ ================= =================
Personal and Corporate Banking 13.0 13.2
Barclaycard 4.7 4.1
Africa Banking 2.7 3.3
Investment Bank 14.6 15.6
Head Office(3) (1.2) (8.8)
================================ ================= =================
Barclays Core 33.8 27.4
Barclays Non-Core 13.6 17.1
================================ ================= =================
Barclays Group adjusted total 47.4 44.5
1 2013 adjusted income and profit before tax has been restated to exclude the Q213 GBP259m gain relating to assets not yet received from the US Lehman acquisition to aid comparability given its material nature in the current year.
2 The profit after tax attributable to other equity holders of GBP170m (2013: GBPnil) is offset by a tax credit recorded in reserves of GBP36m (2013: GBPnil) allocated across the businesses. The net amount of GBP134m, along with NCI, is deducted from profit after tax in order to calculate return on average tangible shareholders' equity and return on average shareholders' equity. Hence, 2014 attributable profit of GBP2,588m has been adjusted for the tax credit recorded in reserves of GBP36m (2013: GBPnil).
3 Includes risk weighted assets and capital deductions in Head Office and Other Operations, plus the residual balance of average ordinary shareholders' equity and tangible ordinary shareholders' equity.
Appendix II - Performance Management
Margins and Balances
Nine Months Ended 30.09.14 Nine Months Ended 30.09.13
Net Interest Average Net Interest Net Interest Average Net Interest
Income Customer Margin Income Customer Margin
Assets Assets
GBPm GBPm % GBPm GBPm %
----------------------------- ------------ --------- ------------ ------------ --------- ------------
Personal and Corporate
Banking 4,679 209,284 2.99 4,390 201,655 2.91
Barclaycard 2,287 34,050 8.98 2,112 31,224 9.04
Africa Banking 1,547 34,720 5.96 1,707 39,482 5.78
----------------------------- ------------ --------- ------------ ------------ --------- ------------
Total Personal and Corporate
Banking, Barclaycard and
Africa Banking 8,513 278,054 4.09 8,209 272,361 4.03
Other 613 284
----------------------------- ------------ --------- ------------ ------------ --------- ------------
Total Net Interest Income 9,126 8,493
-- Total PCB, Barclaycard and Africa Banking net interest income increased 4% to GBP8,513m due to:
- An increase in average customer assets to GBP278.1bn (2013: GBP272.4bn) with growth in PCB mortgages and Barclaycard, partially offset by reductions in Africa Banking as the ZAR depreciated against GBP
- Net interest margin increased 6bps to 4.09% primarily due to savings income in Personal Banking
-- Group net interest income increased to GBP9.1bn (2013: GBP8.5bn) including structural hedge contributions of GBP1.2bn (2013: GBP1.2bn). Equity structural hedge income increased as the weighted average life of the hedge was extended. This was offset by lower product structural hedges driven by the maintenance of the hedge in a continuing low rate environment
Quarterly Analysis for PCB, Barclaycard and Africa Banking
Quarter Ended Quarter Ended Quarter Ended
30.09.14 30.06.14 30.09.13
Net Average Net Net Average Net Net Average Net
Interest Customer Interest Interest Customer Interest Interest Customer Interest
Income Assets Margin Income Assets Margin Income Assets Margin
GBPm GBPm % GBPm GBPm % GBPm GBPm %
------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Personal and
Corporate
Banking 1,622 210,859 3.05 1,529 209,040 2.93 1,530 203,887 2.98
Barclaycard 787 35,308 8.84 754 33,904 8.92 727 31,690 9.10
Africa Banking 540 35,026 6.12 504 34,660 5.83 567 37,634 5.98
------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Total Personal and
Corporate Banking,
Barclaycard and
Africa
Banking 2,949 281,193 4.16 2,787 277,604 4.03 2,824 273,211 4.10
Appendix III - Consolidated Summary Income Statement, Balance Sheet and Statement of Changes in Equity
Consolidated Summary Income Statement
Nine Months Nine Months
Ended Ended
Continuing Operations 30.09.14 30.09.13
GBPm GBPm
=============================================== =========== ===========
Total income net of insurance claims 20,267 21,391
Credit impairment charges and other provisions (1,595) (2,353)
Net operating income 18,672 19,038
Staff costs (8,377) (9,210)
Administration and general expenses (6,219) (6,934)
Operating expenses (14,596) (16,144)
Loss on disposal of undertakings and share
of results of associates and joint ventures (354) (43)
Profit before tax 3,722 2,851
Tax (1,496) (1,040)
=============================================== =========== ===========
Profit after tax 2,226 1,811
Attributable to:
=============================================== =========== ===========
Ordinary equity holders of the parent 1,505 1,182
Other equity holders 170 -
=============================================== =========== ===========
Total equity holders 1,675 1,182
Non-controlling interests 551 629
=============================================== =========== ===========
Profit after tax 2,226 1,811
Earnings per Share from Continuing Operations
=============================================== =========== ===========
Basic earnings per ordinary share(1) 9.4p 8.7p
1 The profit after tax attributable to other equity holders of GBP170m (2013: GBPnil) is offset by a tax credit recorded in reserves of GBP36m (2013: GBPnil). The net amount of GBP134m, along with NCI, is deducted from profit after tax in order to calculate earnings per share.
Appendix III - Consolidated Summary Income Statement, Balance Sheet and Statement of Changes in Equity
Consolidated Summary Balance Sheet
As at As at As at
30.09.14 30.06.14 31.12.13
Assets GBPm GBPm GBPm
=============================================== ========= ========= =========
Cash, balances at central banks and items
in the course of collection 53,783 45,793 46,969
Trading portfolio assets 122,309 128,812 133,069
Financial assets designated at fair value 43,324 39,746 38,968
Derivative financial instruments 382,695 333,220 350,300
Available for sale financial investments 87,891 87,224 91,756
Loans and advances to banks 45,055 43,448 39,422
Loans and advances to customers 437,756 442,549 434,237
Reverse repurchase agreements and other
similar secured lending 158,392 171,934 186,779
Goodwill and intangible assets 7,988 7,878 7,685
Other assets(1) 26,537 14,295 14,443
=============================================== ========= ========= =========
Total assets 1,365,730 1,314,899 1,343,628
Liabilities
=============================================== ========= ========= =========
Deposits and items in the course of collection
due to banks 63,494 64,125 56,974
Customer accounts 441,612 443,638 431,998
Repurchase agreements and other similar
secured borrowing 160,474 173,669 196,748
Trading portfolio liabilities 53,819 56,815 53,464
Financial liabilities designated at fair
value 60,660 62,248 64,796
Derivative financial instruments 379,114 326,501 347,118
Debt securities in issue 87,736 83,832 86,693
Subordinated liabilities 20,418 19,301 21,695
Other liabilities(1) 31,875 19,745 20,193
=============================================== ========= ========= =========
Total liabilities 1,299,202 1,249,874 1,279,679
Equity
=============================================== ========= ========= =========
Called up share capital and share premium 20,730 20,655 19,887
Other reserves 827 (154) 249
Retained earnings 33,697 33,241 33,186
=============================================== ========= ========= =========
Shareholders' equity attributable to ordinary
shareholders of the parent 55,254 53,742 53,322
Other equity instruments 4,317 4,326 2,063
=============================================== ========= ========= =========
Total equity excluding non-controlling
interests 59,571 58,068 55,385
Non-controlling interests 6,957 6,957 8,564
=============================================== ========= ========= =========
Total equity 66,528 65,025 63,949
Total liabilities and equity 1,365,730 1,314,899 1,343,628
1 Other assets include GBP14bn of loans and other liabilities include GBP8bn of deposits relating to the Spanish business, which are now held for sale.
Appendix III - Consolidated Summary Income Statement, Balance Sheet and Statement of Changes in Equity
Consolidated Statement of Changes in Equity
Called
up Share
Capital Other
and Share Equity Other Retained Non-controlling Total
Nine Months Ended 30.09.14 Premium Instruments Reserves(1) Earnings Total Interests Equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============================= ========== ============ ============ ========= ====== =============== =======
Balance at 1 January 2014 19,887 2,063 249 33,186 55,385 8,564 63,949
Profit after tax - 170 - 1,505 1,675 551 2,226
Other comprehensive profit
after tax for the period - - 625 296 921 (127) 794
Issue of shares 843 - - 533 1,376 - 1,376
Issue and exchange of equity
instruments - 2,263 - (155) 2,108 (1,527) 581
Dividends - - - (892) (892) (462) (1,354)
Coupons paid on other equity
instruments - (170) - 36 (134) - (134)
Treasury shares - - (47) (794) (841) - (841)
Other movements - (9) - (18) (27) (42) (69)
============================= ========== ============ ============ ========= ====== =============== =======
Balance at 30 September
2014 20,730 4,317 827 33,697 59,571 6,957 66,528
Called
up Share
Capital Other
and Share Equity Other Retained Non-controlling Total
Three Months Ended 30.09.14 Premium Instruments Reserves Earnings Total Interests Equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============================= ========== ============ ========= ========= ====== =============== =======
Balance at 1 July 2014 20,655 4,326 (154) 33,241 58,068 6,957 65,025
Profit after tax - 80 - 379 459 161 620
Other comprehensive profit
after tax for the period - - 961 112 1,073 (1) 1,072
Issue of shares 75 - - 154 229 - 229
Issue and exchange of equity - - - - - - -
instruments
Dividends - - - (164) (164) (128) (292)
Coupons paid on other equity
instruments - (80) - 17 (63) - (63)
Treasury shares - - 20 (19) 1 - 1
Other movements - (9) - (23) (32) (32) (64)
============================= ========== ============ ========= ========= ====== =============== =======
Balance at 30 September
2014 20,730 4,317 827 33,697 59,571 6,957 66,528
1 Other Reserves includes currency translation reserve of GBP(1.3)bn, available for sale investments of GBP0.6bn, cash flow hedge reserve of GBP0.6bn and other reserves and treasury shares of GBP0.9bn.
Appendix IV - Capital
CRD IV Capital
The Capital Requirements Regulation and Capital Requirements Directive implemented Basel 3 within the EU (collectively known as CRD IV) on 1 January 2014. The rules are supplemented by Regulatory Technical Standards and the PRA's rulebook, including the implementation of transitional rules. However, rules and guidance are still subject to change as certain aspects of CRD IV are dependent on final technical standards and clarifications to be issued by the EBA and adopted by the European Commission and the PRA. All capital, RWA and leverage calculations reflect Barclays' interpretation of the current rules.
Capital Ratios As at As at
======================================================
30.09.14 30.06.14
====================================================== ======== ========
Fully Loaded Common Equity Tier 1 10.2% 9.9%
PRA Transitional Common Equity Tier 1(1) 10.0% 9.8%
PRA Transitional Tier 1 12.9% 12.7%
PRA Transitional Total Capital 16.4% 16.0%
Capital Resources GBPm GBPm
====================================================== ======== ========
Shareholders' equity (excluding non controlling
interests) per the balance sheet 59,571 58,068
- Less: Other equity instruments (recognised
as AT1 capital) (4,317) (4,326)
Adjustment to retained earnings for foreseeable
dividends (787) (596)
Minority interests (amount allowed in consolidated
CET1) 1,182 1,171
Other regulatory adjustments and deductions:
Additional value adjustments (2,641) (2,492)
Goodwill and intangible assets(2) (7,953) (7,828)
Deferred tax assets that rely on future profitability
excluding temporary differences (945) (1,062)
Fair value reserves related to gains or losses
on cash flow hedges(2) (617) (532)
Excess of expected losses over impairment (1,914) (2,036)
Gains or losses on liabilities at fair value
resulting from own credit(2) 581 612
Other regulatory adjustments (88) (172)
Direct and indirect holdings by an institution
of own CET1 instruments (27) (25)
====================================================== ======== ========
Fully loaded CET1 capital 42,045 40,782
Regulatory adjustments relating to unrealised
gains(2) (604) (513)
====================================================== ======== ========
PRA Transitional CET1 capital 41,441 40,269
Additional Tier 1 (AT1) capital
Capital instruments and related share premium
accounts 4,317 4,326
Qualifying AT1 capital (including minority
interests) issued by subsidiaries 7,549 7,592
Less instruments issued by subsidiaries subject
to phase out (106) (114)
Other regulatory adjustments and deductions (6) (28)
====================================================== ======== ========
Transitional Additional Tier 1 capital 11,754 11,776
====================================================== ======== ========
PRA Transitional Tier 1 capital 53,195 52,045
Tier 2 (T2) capital
Capital instruments and related share premium
accounts 771 -
Qualifying T2 capital (including minority
interests) issued by subsidiaries 13,856 13,783
Other regulatory adjustments and deductions (93) (85)
====================================================== ======== ========
PRA Transitional Total regulatory capital 67,729 65,743
Risk weighted assets 412,892 410,987
1 The CRD IV CET1 ratio (FSA October 2012 transitional statement) as applicable to Barclays' Tier 2 Contingent Capital Notes was 12.1% based on GBP50bn of transitional CRD IV CET1 capital and GBP413bn RWAs.
2 The capital impacts of these items are net of tax.
Appendix IV - Capital
Movement in fully loaded Common Equity Tier 1 (CET1) Three Months
Capital
------------------------------------------------------
Ended
------------------------------------------------------
30.09.14
GBPm
------------------------------------------------------ ------------
Opening Common Equity Tier 1 capital 40,782
Profit for the period 459
Movement in own credit(1) (31)
Movement in dividends (418)
Retained regulatory capital generated from earnings 10
Movement in reserves - net impact of share awards 229
Movement in available for sale reserves 93
Movement in currency translation reserves 783
Movement in retirement benefits 113
Other reserves movements (23)
------------------------------------------------------ ------------
Movement in other qualifying reserves 1,195
Minority interests 11
Additional value adjustments (149)
Goodwill and intangible assets(1) (125)
Deferred tax assets that rely on future profitability
excluding those arising from temporary differences 117
Excess of expected loss over impairment 122
Direct and indirect holdings by an institution of own
CET1 instruments (2)
Other regulatory adjustments 84
------------------------------------------------------ ------------
Movement in regulatory adjustments and deductions 58
Closing Common Equity Tier 1 capital 42,045
-- The fully loaded Common Equity Tier 1 (CET1) ratio increased to 10.2% (June 2014: 9.9%) reflecting an increase in CET1 capital of GBP1.3bn to GBP42.0bn, due to
- GBP0.5bn of capital generated from profits in the period, largely offset by the impact of dividends paid and regulatory foreseeable dividends
- GBP0.8bn increase in the currency translation reserve as GBP weakened against USD
-- Transitional total capital increased by GBP2bn to GBP67.7bn. In addition to the increases in CET1 there was a T2 capital issuance of $1.25bn of fixed rate subordinated notes
-- RWAs remained broadly stable at GBP413bn (June 2014: GBP411bn), with growth across Core businesses and the impact of currency movements, partially offset by a decrease in Non-Core
-- As at 30 September 2014, Barclays' fully loaded Tier 1 capital was GBP46,609m, and the fully loaded Tier 1 ratio was 11.3%. Fully loaded total regulatory capital was GBP63,482m and the fully loaded total capital ratio was 15.4%. The fully-loaded Tier 1 capital and total capital measures are calculated without applying the transitional provisions set out in CRD IV and assessing compliance of AT1 and T2 instruments against the relevant criteria in CRD IV
-- The PRA transitional capital is based on guidance provided in the December 2013 publication of PS 7/132, reflecting the minimum Capital Requirements Regulation (CRR) transitional path for the grandfathering of existing capital instruments within certain limits
1 The capital impacts of these items are net of tax.
2 PS 7/13 refers to PRA policy statement PS7/13 on strengthening capital standards published in December 2013.
Appendix V - Leverage
Leverage ratio requirements
On 10 October 2014, the European Commission adopted the delegated act to reflect the Basel Committee's revised standards for calculating the leverage ratio as outlined in BCBS 270. The adoption of the delegated act by the Commission triggered a three month scrutiny period, with the possibility of a further three month extension, within which the European Parliament or European Council can reject the act.
In June 2014, the PRA issued Supervisory Statement 3/13 which requires certain UK Banks to meet a 3% fully loaded leverage ratio based on the revised Basel 3 leverage calculation from 1 July 2014.
Barclays calculates its Basel 3 leverage ratio based on its understanding of the revised Basel standards and the requirements contained in the delegated act which reflect the most current understanding of implementation of the Basel standards in the European Union. The final rules may result in a different calculation methodology should the European Parliament or European Commission reject the delegated act.
Estimated BCBS 270 Leverage Impact
As at 30.09.14 As at 30.06.14
Leverage exposure GBPbn GBPbn
============================================== ============== ==============
Accounting assets
Derivative financial instruments 383 333
Cash collateral 60 60
Reverse repurchase agreements 158 172
Loans and advances and other assets 765 750
============================================== ============== ==============
Total IFRS assets 1,366 1,315
Derivatives adjustments
Derivatives netting (345) (298)
Adjustments to cash collateral (42) (31)
Net written credit protection 28 29
Potential Future Exposure on derivatives 195 195
---------------------------------------------- -------------- --------------
Total derivatives adjustments (164) (105)
Securities financing transactions adjustments 34 56
Regulatory deductions and other adjustments (22) (18)
Weighted off balance sheet commitments 110 105
Total fully loaded leverage exposure 1,324 1,353
CRD IV common equity tier 1 capital 42.0 40.8
CRD IV additional tier 1 capital 4.6 4.6
CRD IV tier 1 capital 46.6 45.4
Fully loaded leverage ratio 3.5% 3.4%
-- The BCBS 270 leverage exposure decreased by GBP29bn to GBP1,324bn
- IFRS derivatives increased GBP50bn to GBP383bn, which was broadly offset by a GBP47bn increase in allowable netting to GBP345bn. Eligible cash collateral netting increased GBP11bn to GBP42bn, driven by business activity and optimisations
- IFRS reverse repurchase agreements decreased GBP14bn to GBP158bn and Securities Financing Transactions (SFT) adjustments reduced GBP22bn to GBP34bn due to lower match book trading and optimisations
Appendix VI - Credit Risk
Analysis of Loans and Advances and Impairment
CRLs %
Gross Impairment L&A Net Credit of Gross Loan Impairment Loan Loss
As at 30.09.14 L&A Allowance of Impairment Risk Loans L&A Charges(1) Rates(2)
GBPm GBPm GBPm GBPm % GBPm bps
========================= ======= ========== ============== =========== ========= =============== =========
Personal & Corporate
Banking 144,466 1,143 143,323 2,490 1.7 203 19
Africa Banking 20,897 694 20,203 1,124 5.4 217 139
Barclaycard 36,506 1,703 34,803 1,723 4.7 821 301
========================= ======= ========== ============== =========== ========= =============== =========
Barclays Core 201,869 3,540 198,329 5,337 2.6 1,241 82
Barclays Non-Core 23,464 554 22,910 1,489 6.3 137 52
========================= ======= ========== ============== =========== ========= =============== =========
Total Group Retail 225,333 4,094 221,239 6,826 3.0 1,378 78
Investment Bank 123,098 37 123,061 44 - (21) (2)
Personal & Corporate
Banking 78,324 640 77,684 1,759 2.2 156 27
Africa Banking 16,219 249 15,970 631 3.9 53 44
Head Office and Other
Operations 3,294 - 3,294 - - - -
========================= ======= ========== ============== =========== ========= =============== =========
Barclays Core 220,935 926 220,009 2,434 1.1 188 11
Barclays Non-Core 42,157 594 41,563 938 2.2 61 19
========================= ======= ========== ============== =========== ========= =============== =========
Total Group Wholesale 263,092 1,520 261,572 3,372 1.3 249 13
Group Total 488,425 5,614 482,811 10,198 2.1 1,627 43
Traded Loans 2,285 n/a 2,285
Loans and advances
designated at fair
value 19,397 n/a 19,397
========================= ======= ========== ==============
Loans and advances
held at fair value 21,682 n/a 21,682
Total loans and advances 510,107 5,614 504,493
As at 30.06.14
========================= ======= ========== ============== =========== ========= =============== =========
Personal & Corporate
Banking 143,839 1,302 142,537 2,648 1.8 133 19
Africa Banking 20,820 700 20,120 1,175 5.6 167 162
Barclaycard 34,854 1,607 33,247 1,606 4.6 537 311
========================= ======= ========== ============== =========== ========= =============== =========
Barclays Core 199,513 3,609 195,904 5,429 2.7 837 85
Barclays Non-Core 37,383 823 36,560 2,233 6.0 101 54
========================= ======= ========== ============== =========== ========= =============== =========
Total Group Retail 236,896 4,432 232,464 7,662 3.2 938 80
Investment Bank 117,259 31 117,228 43 - (26) (4)
Personal & Corporate
Banking 80,451 611 79,840 1,852 2.3 97 24
Africa Banking 15,263 263 15,000 633 4.1 29 38
Head Office and Other
Operations 2,496 - 2,496 - - - -
========================= ======= ========== ============== =========== ========= =============== =========
Barclays Core 215,469 905 214,564 2,528 1.2 100 9
Barclays Non-Core 40,598 1,629 38,969 2,705 6.7 72 36
========================= ======= ========== ============== =========== ========= =============== =========
Total Group Wholesale 256,067 2,534 253,533 5,233 2.0 172 14
Group Total 492,963 6,966 485,997 12,895 2.6 1,110 45
Traded Loans 3,074 n/a 3,074
Loans and advances
designated at fair
value 18,454 n/a 18,454
========================= ======= ========== ==============
Loans and advances
held at fair value 21,528 n/a 21,528
Total loans and advances 514,491 6,966 507,525
1 Excludes impairment charges on available for sale investments and reverse repurchase agreements.
2 Loan Loss Rate calculation includes the gross loans and advances for Barclays Non-Core (Retail: GBP11,777m, Wholesale: GBP1,694m) that have been reclassified to held for sale following the agreement to sell the Spanish businesses to Caixabank S.A.
Appendix VII - Other Information
Other Information
Results Timetable(1) Date
======================================================== ============
Ex-dividend date 6 November
2014
Dividend Record date 7 November
2014
Scrip reference share price set and made available 13 November
to shareholders 2014
Cut off time of 4.30 pm (London time) for the receipt 21 November
of Mandate Forms or Revocation Forms (as applicable) 2014
Dividend Payment date /first day of dealing in New 12 December
Shares 2014
2014 Full Year Results Release and Audited Annual 3 March 2015
Report
For qualifying US and Canadian resident ADR holders, the third
interim dividend of 1p per ordinary share becomes 4p per ADS
(representing four shares). The ADR depositary will post the
third interim dividend on 12 December 2014 to ADR holders on
the record at close of business on 7 November 2014. The ex-dividend
date will be 5 November 2014.
Nine Months Nine Months
Ended Ended % Change(3)
Exchange Rates(2) 30.09.14 30.09.13
========================================== =============== =========== ===========
Period end - USD/GBP 1.62 1.62 0%
Average - USD/GBP 1.67 1.54 8%
3 Month Average - USD/GBP 1.67 1.55 8%
Period end - EUR/GBP 1.28 1.19 8%
Average - EUR/GBP 1.23 1.17 5%
3 Month Average - EUR/GBP 1.26 1.17 8%
Period end - ZAR/GBP 18.32 16.21 13%
Average - ZAR/GBP 17.87 14.62 22%
3 Month Average - ZAR/GBP 17.98 15.48 16%
Share Price Data 30.09.14 30.06.14 30.09.13
========================================== =============== =========== ===========
Barclays PLC (p) 227.45 212.80 265.50
Barclays PLC number of shares (m) 16,453 16,417 16,113
Barclays Africa Group Limited (formerly
Absa Group Limited) (ZAR) 154.13 161.50 147.40
Barclays Africa Group Limited (formerly
Absa Group Limited) number of shares (m) 848 848 848
For further information please contact
Investor Relations Media Relations
========================================== =============== =========== ===========
Charlie Rozes +44 (0) 20 7116 5752 Giles Croot +44 (0) 20 7116
6132
More information on Barclays can be found on our website:
Barclays.com
Registered Office
1 Churchill Place, London, E14 5HP, United Kingdom. Tel: +44 (0)
20 7116 1000. Company number: 48839
Registrar
The Registrar to Barclays, Aspect House, Spencer Road, Lancing,
West Sussex BN99 6DA United Kingdom.
Tel: 0871 384 2055(4) from the UK or +44
121 415 7004 from overseas.
1 Note that these announcement dates are provisional and subject to change. Any changes to the Scrip Dividend Programme dates will be made available at Barclays.com/dividends.
2 The average rates shown above are derived from daily spot rates during the year used to convert foreign
currency transactions into GBP for accounting purposes. 3 The change is the impact to GBP reported information.
4 Calls cost 8p per minute plus network extras. Lines open 8.30am to 5.30pm UK time, Monday to Friday, excluding UK public holidays.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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